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The Honolulu Advertiser
Posted on: Monday, March 10, 2008

COMMENTARY
Tort reform not the answer doctors need

By Richard S. Miller

The Advertiser's March 2 editorial urging "tort reform" was seriously flawed.

There is no question many dedicated Hawai'i physicians desperately need economic relief. But so-called tort reform, at least in its current form of capping non-economic losses, is not the way to go.

Rather, two other things dominate. First, as your editorial stated: "We already pay our physicians about a third of what they make on the Mainland. ..." Second, Hawai'i is among the highest cost-of-living states in the nation. Thus, in terms of buying power, a salary of $100,000 in Honolulu is worth only $54,500.26 in Houston, Texas. Put these two factors together and they spell disaster. The real culprits are those who have failed to make a reasonable effort to control Hawai'i's cost of living, and those who decide what reimbursements Hawai'i physicians receive. Examples: Where are the gas caps, governor? Are HMSA's executives really worth so much more than physicians? How much in legal fees is HMSA paying to fight members' valid claims of wrongful denial of benefits?

Instead, medical malpractice has become the prime target of physicians' anger. It is understandable that professionals, charged with huge responsibility, might fear and resent malpractice lawsuits. And many malpractice premiums do seem obscenely large. But, capping damages for non-economic losses will not produce the savings that will keep physicians from leaving.

First, capping damages may lower costs but may not reduce premiums. For years the cycle of high and low malpractice premiums has related more to economic developments, competition among insurers and the status of the stock market than to fluctuations in damages.

However, it is obvious that capping non-economic losses will have an adverse effect only on the most seriously injured patients, since the caps only apply to them.

Here are the factors that affect damage caps on non-economic losses:

First, medical malpractice suits are expensive to bring. Physicians have the benefit of a rule of law that doesn't apply to the rest of us. We are judged by a "reasonably prudent person" standard, which asks whether we could reasonably have foreseen the risk caused by our deeds or misdeeds and whether we unreasonably proceeded. It is usually not necessary to bring in experts to testify on what is reasonable or unreasonable — a jury can usually figure that out.

For the most part, however, that test does not apply to physicians. Their liability must ordinarily be based on their failure to follow professional standards. To prove a failure to follow such standards, expert witnesses must testify. Medical professionals in most states usually refuse to testify against colleagues. It then is necessary to bring expert witnesses from the Mainland, and that involves many thousands of dollars.

Second, because the applicable standard of care is based on what physicians actually do, the practice of "defensive medicine," where physicians require tests and procedures that are not really necessary but they think will protect them from being charged with malpractice, raises the standard. Here is a situation of "being hoist by their own petard." They then may be found liable for failure to meet an unnecessarily high standard.

Third, malpractice premiums are really much lower than they would be if all patients who suffered malpractice were properly compensated. Because malpractice suits are very expensive, it doesn't pay to proceed unless the likely damages are very high. Suits below the line of profitability, which knowledgeable lawyers peg at $500,000, just don't get brought!

Fourth, a hidden reason why damage caps on noneconomic losses are being sought is to further reduce the bringing of malpractice lawsuits. In our contingent fee system, plaintiffs' lawyers get nothing if they lose the case or cannot effect a settlement. Their pay, in effect, is paid out of the damages, which normally include non-economic losses, such as mental distress. If caps are placed on non-economic losses, then the lawyers will have to be paid from economic losses. This will adversely affect the injured patient, who will not fully recoup actual losses, but may in many cases require the plaintiff's lawyer to reduce his fee to a level that will make it unprofitable to pursue the case at all!. Thus, a motive for imposing such caps may well be to further reduce the number of medical malpractice suits.

Hawai'i physicians have real economic problems and short- and long-term solutions should be explored: We should seek to improve reimbursements from health insurers and from the federal government through Medicare and Medicaid, and our state government should undertake unsparing efforts to reduce the cost of living in Hawai'i. Our Legislature should give serious consideration to tax credits for excessive malpractice premiums, particularly for practitioners in rural areas. And we should applaud and encourage efforts by the Board of Medical Examiners to protect us from malpractice-prone physicians.

Finally, sparked by research at the national level, we should consider expanding liability from the individual physician to the "systems" whose failures and mistakes often combine with physicians' actions to produce patient injury or harm.

Richard S. Miller is emeritus professor of law and former dean, University of Hawai'i. He wrote this commentary for The Advertiser.